Many CEOs are letting you pick up the tab for minimum wage increases. That’s not right.
Photograph: Alamy

Should you blame minimum wage increases for your lunch getting more expensive? Fast-food giant Chipotle certainly wants you to. In cities like San Francisco – where wages were recently raised to $12.25 per hour – the company is using that as a reason to increase menu prices substantially. According to numerous consumer reports, and a quick jaunt into a Chipotle in the city, items have gone up between 10% and 14%, depending on location.

Chipotle is just the latest company in the city to claim labor costs as the reason for price hikes. It sounds logical. Wages go up 10%, prices of menu items go up 10%. It’s fair, right? But Chipotle co-CEOs Steve Ells and Monty Moran’s earnings in 2014 were $28.9m and $28.2m, respectively. Ells also brought in around $42m in stock options in 2014, yet prices must go up because the lowest paid workers received a $1 raise? This is yet more evidence that executive pay and corporate profit margins must be maintained, at the expense of minimum wage workers.

It doesn’t make sense considering Chipotle’s growth in both sales and profits over the past year. The company saw a 47.6% increase in profits to $122.6m, while sales were up 20.4%, to $1.09bn. Yet, with the company wanting to maintain specific profit margins, prices go up, even when they don’t have to.

Ells and Moran saw their own personal pay increase 15% year-to-year, according to Chipotle’s own reporting – that’s millions of dollars – but sadly, minimum wage debates over the past year have highlighted how companies, from Chipotle to McDonald’s to Walmart, just can’t afford to give their workers a living wage.

Ells and Moran could easily have taken a pay cut, or frozen their income for the year, but instead Chipotle spokesman Chris Arnold was clear about what the company wanted:

California, and San Francisco in particular, has a high cost of doing business. In San Francisco, for example, our occupancy costs are about double the Chipotle average as a percentage of sales, and our menu prices there are right around the average for Chipotle restaurants around the country, so increases to wages can have a greater impact than they might elsewhere.

Historical evidence does not prove that increasing the minimum wage will result in job losses or price increases, Reich argues. He cites the wage increase in 1996 when he was labor secretary. “In fact, we had more job gains over the next four years than in any comparable period in American history.”

Fear-mongering has led many Americans to believe that the CEOs and executives deserve the millions and millions of dollars they rake in annually, while those who struggle, work hard and deliver the productivity are to blame for price hikes and store closures. This must end. Next time you find yourself digging deeper into your wallet to pay for lunch, don’t blame minimum wage workers. Blame executives who continue to see their bank accounts add zeros yet let you pick up the tab when low-paid workers get a small raise.